RI’s Healthcare Is Fraying - Lifespan Loses $35M, Layoffs Pending and Questions at Care New England
Thursday, December 05, 2019
There is financial trouble in the Rhode Island healthcare system.
“Rhode Island continues to be a very challenging environment for the health care industry. To succeed, we need to be agile, open to new ideas, and find innovative ways to provide high quality, compassionate care for more patients with less reimbursement. We are committed to doing just that,” said Dr. Timothy J. Babineau, president and CEO of Lifespan.
Due to Lifespan’s finances, Babineau has said layoffs are on the table and union officials are furious.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIn an interview on GoLocal LIVE, Linda McDonald, President of the United Nurses and Allied Professional (UNAP) said, “UNAP represents over 2,700 direct caregivers at Rhode Island Hospital and Hasbro Children's Hospital. It's well-known that were already stretched very thin on staffing and we would be very surprised if they could possibly handle layoffs at the bedside."
Watch Full Interview Above
“It would definitely interrupt care -- we feel we're already stretched too thin. The nurses and other health professionals give all that they can but any talk of decreasing the amount of staff at the bedside would dramatically change the quality of care that can be delivered at those hospitals and I would imagine the union would potentially take action, of course, if [we] get indications from Lifespan that this could come to pass,” said McDonald.
According to Lifespan, the “2019 financial results can be traced to several factors including, but not limited to: a dramatic and unexpected reduction in Medicare rates of nearly $25 million; a full year’s impact of Memorial Hospital closing, resulting in excessive demands on both The Miriam and Rhode Island hospital, creating throughput inefficiencies; a continuing deterioration in payor mix; and the continued steerage of tertiary care to Boston” — a clear reference to Care New England’s relationship with Boston hospitals that is sending more and more Rhode Island patients to Boston rather than to competitive in-state hospitals.
"Dr. Babineau's suggestion that layoffs be on the table represents a callous and alarmingly out-of-touch understanding of bedside care at Rhode Island and Hasbro Children's Hospitals. Frontline caregivers and support staff are already stretched thin and constantly asked to do more with less. Layoffs will dramatically and adversely impact patient care, and I would strenuously caution Dr. Babineau to consider that before his decisions cripple Rhode Island's only level one trauma hospital," said Frank Sims, RN, president of UNAP Local 5098.
Finances for Lifespan and Care New England - Memorial Hospital's Legacy
On Wednesday, Lifespan reported a loss of $55 million from operations without investment income in fiscal year 2019, which ended September 30, 2019.
With investment income, loss from operations was close to $23 million. These results led to a net loss of $35 million for fiscal year 2019.
While some of Lifespan's losses were linked to the closure of Memorial Hospital by Care New England, that hospital group was claiming that the closure of Memorial has allowed them to go from catastrophic losses -- more than $120 million over a three year period to marginally better than break even.
"Care New England Health System this week that in Fiscal Year 2019 it achieved income from operations of $3.8 million, a $31.9 million improvement over FY 2018. Its obligated group (CNE excluding Memorial Hospital) achieved income from operations of $5 million, slightly below the $5.3 million generated in FY 2018," said the company.
But Care New England refused to answer questions about the state of the pension fund at the hospital. As GoLocal reported in February of 2018, "According to CNE financials, the pension fund is underfunded by over $100 million. The fund did realize substantial gains that mirrored the performance of the stock market."
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